According to a term sheet and an advertisement published in a newspaper on Thursday, the initial public offering price range for India’s Tata Technologies is 475–500 rupees per share. This places the business’s valuation at around $2.5 billion, making it the first Tata Group subsidiary to go public in over two decades.
Since the beginning of this year, there have been a record 194 initial public offerings (IPOs) in India. This comes at a time when the stock market has reached all-time highs. The country’s economic development potential and its large customer base make it an appealing possibility for businesses and investors.
At the high end of the price band, Tata Technologies, which offers engineering and technology services to manufacturers of automobiles, aircraft, and heavy machinery, would be valued at 202.83 billion rupees, much less than most of its competitors. According to experts, however, it has an appropriate price concerning its profits (PE).
Arun Kejriwal, founder of Kejriwal Research and Investment Services, said, “They appear to have got the math right with respect to the IPO price band.”
According to Kejriwal’s estimations, the price-to-earnings ratio for Tata Technologies is between 30 and 32. Still, its competitors, such as fellow Tata group company Tata Elxsi, KPIT Technologies (KPIE.NS), and L&T Technology Services (LTEH.NS), have a PE ranging from 38 to 100.
According to a story from Reuters from last week, Tata Technologies was reportedly in discussions with Morgan Stanley Investment Management, Blackrock, and certain U.S. hedge funds to invite them to invest in its IPO at a valuation of $2.5 billion.
During the first public offering (IPO), which will take place from November 21–24, Tata Motors (TAMO.NS) and other stockholders will sell up to 60.9 million company shares. On November 30, the firm will begin trading publicly for the first time.
In 2004, Tata Consultancy Services (TCS.NS) became the most recent member of the Tata group to enter the public market. It has grown to become the most successful IT services company in the country.
During the six months that concluded on September 30, Tata Technologies’ consolidated profit increased by almost 36% to 3.52 billion rupees, while the company’s sales increased by roughly 34%.
BofA Securities India and JM Financial manage the initial public offering as the lead managers.